Exhibit 4.5
VOTING AGREEMENT
by and among
FRIEDMAN, BILLINGS, RAMSEY GROUP,
INC.,
FBR TRS HOLDINGS,
INC.,
FBR CAPITAL MARKETS
CORPORATION,
FOREST HOLDINGS (ERISA)
LLC,
and
FOREST HOLDINGS
LLC
dated as of
July 20, 2006
TABLE OF CONTENTS
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Page
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ARTICLE 1
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DEFINITIONS
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Section 1.1
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Definitions
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1
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ARTICLE 2
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BOARD COMPOSITION
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Section 2.1
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Composition of
the Board
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2
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Section 2.2
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Composition of
Subsidiary Boards
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4
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Section 2.3
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Continuing
Committee Representation
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4
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Section 2.4
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Scale-Back of
Purchaser Board Representation
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4
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Section 2.5
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Scale-Back of
FBR TRS Board Representation
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4
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Section 2.6
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Implementation
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5
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Section 2.7
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Observer
Status
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5
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ARTICLE 3
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AFFILIATE TRANSACTIONS
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Section 3.1
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Affiliate
Transactions
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6
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ARTICLE 4
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REPRESENTATIONS AND
WARRANTIES
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Section 4.1
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Representations
and Warranties
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6
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ARTICLE 5
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MISCELLANEOUS
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Section 5.1
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Term
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7
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Section 5.2
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Counterparts
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7
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Section 5.3
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Governing
Law
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7
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Section 5.4
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Entire
Agreement
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7
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Section 5.5
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Specific
Performance
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8
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Section 5.6
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Notices
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8
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Section 5.7
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Assignment,
Transfers
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9
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Section 5.8
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Headings
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9
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Section 5.9
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Amendments and
Waivers
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9
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Section 5.10
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Interpretation;
Absence of Presumption
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9
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Page
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Section 5.11
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Severability
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10
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Section 5.12
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Jurisdiction
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10
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Section 5.13
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Waiver of Jury
Trial.
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10
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Section 5.14
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Further
Assurances
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10
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Section 5.15
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Recapitalization, Etc .
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10
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Section 5.16
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FBR Group
Guarantee
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11
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Section 5.17
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FBR TRS
Acknowledgment
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11
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-ii-
THIS VOTING AGREEMENT (the “
Agreement “), dated as of July 20, 2006, is made
by and among Friedman, Billings, Ramsey Group, Inc., a Virginia
corporation, (“ FBR Group “), FBR TRS Holdings,
Inc., a Virginia corporation, (“ FBR TRS “), FBR
Capital Markets Corporation, a Virginia corporation, (“
FBR “ or the “ Company “), Forest
Holdings (ERISA) LLC, a Delaware limited liability company,
(“ Crestview ERISA “) and Forest Holdings LLC, a
Delaware limited liability company, (“ Crestview LLC
“ and together with Crestview ERISA, “ Purchaser
“).
RECITALS :
WHEREAS, FBR Group, FBR TRS, FBR and
Purchaser entered into a letter agreement on June 22, 2006, as
amended on July 14, 2006, setting forth the principal terms
and conditions pursuant to which Purchaser would acquire shares of
common stock of the Company (“ Shares “)
concurrently with the 144A private placement of Shares, and be
granted options to acquire additional Shares (the “
Options “) from the Company, which letter agreement
contemplated that the parties thereto would further memorialize
their agreements with respect to such transactions in definitive
agreements;
WHEREAS, FBR and Purchaser entered
into an Investment Agreement, dated as of July 19, 2006, (the
“ Investment Agreement “) setting forth,
inter alia , the terms and conditions pursuant to which
Purchaser is acquiring the Shares from the Company and is being
granted the Options;
WHEREAS, following consummation of
the transactions contemplated by the Investment Agreement,
Purchaser will own a significant percentage of the equity interests
in the Company; and
WHEREAS, the parties hereto desire
to enter into this Agreement to provide for certain voting rights
of the parties hereto in accordance with Section 13.1-671 of
the Virginia Stock Corporation Act.
NOW, THEREFORE, in consideration of
the premises and the covenants and agreements contained herein and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions
. Capitalized terms not defined herein shall have their respective
meanings specified in the Investment Agreement. As used in this
Agreement, the following terms shall have the following respective
meanings:
“ Cause “ shall
mean the Director’s commission of a felony or any other crime
involving moral turpitude or of a material dishonest act or fraud
against the Company or any of its Affiliates, or any act or
omission by the Director that is the result of misconduct or bad
faith and that is, or may reasonably be expected to be, materially
injurious to the Company or any of its Affiliates.
-1-
“ Director “
shall mean a member of the Board.
“ FBR TRS Designees
“ shall have the meaning specified in
Section 2.1.
“ Independent Directors
“ shall have the meaning specified in
Section 2.1.
“ Original Shares
“ shall mean the number of Shares acquired by Purchaser with
the Invested Capital (including Shares issued in respect of, in
exchange for or in substitution of such Shares by reason of any
Reorganization).
“ Purchaser Designees
“ shall have the meaning specified in
Section 2.1.
“ Reorganization
“ shall mean any reorganization, recapitalization, stock
dividend, stock split or any similar change in the capital
structure of the Company.
ARTICLE 2
BOARD COMPOSITION
Section 2.1 Composition of
the Board . Each of the parties to this Agreement agrees that
it and its Affiliates which it controls will vote all of the Shares
under its control to cause the Board, effective from and after the
Closing, to have the following size and composition:
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(a)
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Initial
Board . (i) The
Board will initially consist of nine Directors, who shall be
nominated as follows:
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(A)
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one Director
shall be designated for election or appointment, as applicable, by
Crestview ERISA and one Director shall be designated for election
or appointment, as applicable, by Crestview LLC (collectively, the
“ Purchaser Designees “);
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(B)
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three Directors
shall be designated for election or appointment, as applicable, by
FBR TRS (the “ FBR TRS Designees “);
and
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(C)
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four Directors
who shall be independent within the meaning of the rules
promulgated by the SEC and the exchange(s) on which the Shares are
listed (the “ Independent Directors “) shall be
designated for election or appointment, as applicable, by FBR TRS
who shall be reasonably acceptable to Purchaser.
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(ii)
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The Purchaser
Designees and FBR TRS Designees will be elected or appointed, as
applicable, and seated as Directors no later than the Closing, and
the Independent Directors shall be designated for appointment, and
shall be appointed, to fill the four vacancies existing on the
Board
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-2-
immediately following the Closing as
promptly as reasonably practicable thereafter (it being understood
that it may take some time following the Closing until all of the
Independent Directors are identified).
(b) Removal and Replacement of
Directors . Directors may be removed from office and replaced
as follows (it being understood that the following shall be
effected in a manner that is not in violation of the Virginia Stock
Corporation Act or the Articles of Incorporation or Bylaws of the
Company regarding removal of directors. That is, removal of any
director shall be subject to the approval of the holders of a
majority of the outstanding shares of common stock of the
Company):
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(i)
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Any party
hereto may designate any or all of its own designees for removal
from the Board and may designate a nominee for appointment to the
Board to fill any vacancy resulting from any such
removal.
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(ii)
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For so long as
Purchaser has the right to designate one Director nominee for
election or appointment, as applicable, to the Board pursuant to
this Article 2, FBR TRS may not take any action to cause the
removal of a Purchaser Designee except for Cause and in that event
the relevant Purchaser entity may nominate a replacement for the
Director so removed.
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(iii)
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FBR TRS shall
have the right to designate for removal any or all of the
Independent Directors at any time and shall have the right to
designate an Independent Director nominee to fill the vacancy
resulting from any such removal; provided that FBR TRS shall
consult Purchaser with respect to the selection of a replacement
for any such Independent Director.
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(iv)
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For so long as
Purchaser has the right to designate one Director nominee for
election or appointment, as applicable, to the Board pursuant to
this Article 2, in the event of a vacancy created by the departure
(for any reason, including death, disability, retirement,
resignation or removal (with or without cause)) of an Independent
Director, FBR TRS shall have the right to designate a replacement
Independent Director who shall be reasonably acceptable to
Purchaser for appointment to fill the vacancy resulting from such
departure; provided that if FBR TRS and Purchaser are unable
to agree on the replacement Independent Director (x) FBR TRS
shall have the right to designate the replacement Independent
Director for appointment to fill the vacancy resulting from such
departure to serve until such time as FBR TRS and Purchaser can
agree on a permanent replacement and (y) if FBR TRS and
Purchaser are unable to agree on a permanent replacement
Independent Director within 45 days after the creation of such
vacancy, the remaining permanent Independent Directors, if any,
shall have the right to designate the permanent replacement
Independent Director for appointment to fill the vacancy resulting
from such departure after consultation with both FBR TRS and
Purchaser.
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Section 2.2 Composition of
Subsidiary Boards . Each of the parties to this Agreement
agrees that, for so long as Purchaser has the right to designate
one Director nominee for election or appointment, as applicable, to
the Board pursuant to this Article 2, Purchaser shall have the
right to designate one of the Purchaser Designees (or another
representative reasonably acceptable to FBR TRS) for election or
appointment, as applicable, to the board of directors of each
Subsidiary of the Company other than the direct and indirect
Subsidiaries of the Company that are registered investment
advisers; provided that to the extent that applicable Law
does not permit such Purchaser Designee (or other representative
reasonably acceptable to FBR TRS) to serve as a member of any such
Subsidiary board of directors, such Purchaser Designee shall be
entitled to observer status on such board of directors. The Company
hereby agrees to take such action (and to cause its officers and
Subsidiaries to take such action), including but not limited to
voting its shares of capital stock in each of its Subsidiaries, as
shall be necessary in order to carry out the intents and purposes
of this Section 2.2.
Section 2.3 Continuing
Committee Representation . Each of the parties to this
Agreement agrees that, for so long as Purchaser has the right to
designate one Director nominee for election or appointment, as
applicable, to the Board pursuant to this Article 2, each Committee
of the Board, to the extent permitted by applicable Law (including
the rules of the exchange on which the Shares are listed), shall
have as a member at least one Purchaser Designee and one FBR TRS
Designee; provided that to the extent such applicable Law
does not permit such designee(s) to be full members of such
Committees, such designee(s) shall be entitled to observer status
on such Committees.
Section 2.4 Scale-Back of
Purchaser Board Representation . Each of the parties to this
Agreement agrees that:
(a) From the time that
(1) Purchaser and its Affiliates who become parties to this
Agreement cease to own at least 66 2 / 3
% of the Original
Shares, Crestview LLC shall no longer be entitled to designate a
nominee for election or appointment to the Board and
(2) Purchaser and its Affiliates who become parties to this
Agreement cease to own at least 33 1 / 3 % of the number of Original Shares,
Crestview ERISA shall no longer be entitled to designate a nominee
for election or appointment to the Board, and upon either of the
foregoing, the applicable Purchaser Designee shall be replaced by
an additional Independent Director nominee designated for election
or appointment to the Board by FBR TRS who shall be, in the case of
clause (1) above only, reasonably acceptable to
Purchaser.
(b) From and after such time as
Purchaser and its Affiliates cease to own at least 66
2
/ 3 % of the Original Shares, Purchaser
shall have no further approval rights with respect to Independent
Directors.
Section 2.5 Scale-Back of
FBR TRS Board Representation . Each of the parties to this
Agreement agrees that:
(a) If FBR TRS sells, transfers or
otherwise disposes of greater than 50% of its Shares (measured as
of the Closing but including Shares issued in respect of, in
exchange for or in substitution of such Shares by reason of any
Reorganization), FBR TRS shall no longer have the rights described
in Section 2.1 above to select nominees for election or
appointment to the Board as Independent Directors.
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(b) FBR TRS shall retain the right
to designate for election or appointment to the Board the three FBR
TRS Designees unless both (i) FBR TRS sells, transfers or
otherwise disposes of greater than 50% of its Shares (measured as
of the Closing but including Shares issued in respect of, in
exchange for or in substitution
